What Makes Independent Oil, Gas Companies Successful?
Rigzone’s inaugural Ideal Employer Survey highlights what our readers see as the top independent oil and gas companies, with U.S. independent Anadarko taking the top slot. The survey of 8,466 participants, mainly drawn from Rigzone’s database of oil and gas professionals, sought to gather insight on the qualities that workers want from an employer. But what makes for a successful independent oil and gas company that is able to attract top energy professionals? Industry analysts shared their views with Rigzone.
Speed, Agility Key to Oil, Gas Independents Strategy, Success
In today’s environment, two components are needed for a successful independent oil and gas company – good people and good assets – Kris Nicol, principle analyst with Wood Mackenzie’s corporate service practice said.
“You have to be in the right parts of the right plays, particularly if you’re focused on the onshore Lower 48 [U.S. states],” Nicol commented. Independent oil and gas companies also have to have the right strategy in place to facilitate growth, which often or not includes a strong balance sheet. Whether a company has maintained its hedge through the downturn is another factor of continued success. Companies that have continued to invest, maintained consistency in their approach and haven’t taken on too much risk will be successful, Nicol said.
The key to independent oil and gas companies’ success has been their speed and agility to react to the market, scaling their organizations and shifting their strategy, Linda Castaneda, U.S. Oil & Gas Advisory Leader with Ernst & Young, said.
The competitive nature of the independent oil and gas landscape has meant that independents, particularly smaller independents, need to innovate and adapt very quickly to technology, Thomas McNulty, director of Navigant Consulting’s transaction advisory services practice in Houston, said.
The smaller size of independents has also allowed for more agility. This is true of both midsize and large independents, the latter which include multi-billion companies with operations across multiple continents, said Castaneda. By comparison, the supermajors structurally are very challenged in terms of trying to make changes, Nicol said.
“Steering a supermajor is like trying to turn a supertanker around,” Nicol commented.
At smaller independent companies, communication is lightly to be more direct compared with a company with thousands of employees. Unlike major oil and gas companies with deepwater and oil sands assets, independent oil and gas companies have also had more flexibility in cost cutting during the past two years.
In larger companies, analysis paralysis can also occur as companies continue to gather data but fail to move forward with a decision. This is understandable due to the higher cost of being wrong. Independents, on the other hand, are able to make decisions quickly, but backtrack if they make a mistake, Castaneda said.
Another factor in mid and larger-size independent oil and gas company success is their ability to get the right data to make decisions, Castaneda said. Companies that have fully embraced Big Data and Internet of Things technology to gain access to data will be able to quickly integrate data.
“The supermajors also have spent a lot of money on technology, but it is how independents have been able to implement that technology at low cost that has made them more effective in the shale space,” Castaneda said.
Castaneda believes that the independents’ investment in technology and ability to make and learn from mistakes, will remain a recipe for success.
“However, even the independents know that, to survive in today’s new price culture, fundamental changes will need to be made to cost structure. Rather than just laying off workers and rehiring when prices recover, companies will need to become more digitized and truly transform their workforce for success,” Castaneda stated.
The challenge for these companies has been to implement the right infrastructure and global processes without losing the culture and small company mentality that has made them successful, Castaneda said.
123
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension